An appeals panel reversed a convinction against a Warren County homebuilder convicted in a $3.5 million mortgage scheme in the Cincinnati area.

Bernard Kurlemann's conviction on charges of making false statements was reversed by a three-judge panel of the 6th U.S. Circuit Court of Appeals in Cincinnati. The court upheld other Kurlemann's other convictions involving bankruptcy fraud.

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Kurlemann, of Mason, is serving four years in prison stemming from his 2010 convictions. It's not immediately certain how much of the sentence stems from the overturned conviction.

Prosecutors say the luxury-homes builder submitted false information on loan documents regarding down payments that were never made. They say that enabled Kurlemann to walk away from $3.5 million in mortgage debt.

The court says Kurlemann's actions may not amount to lying, but rather concealment.

The court also ordered a new sentencing hearing for another man convicted in the case, Eric Duke.

Duke, who was the key witness against Kurlemann and pleaded guilty to get a lighter sentence, is serving a five-year sentence. The court ruled that the sentence might be too long.